F.—l.

COMMERCIAL BRANCH. The Commercial Branch, which was established in March, 1930, has during its first year of working not only helped considerably to maintain the financial position of the telephone branch, but also established between the Department and the telephone public a link in which the predominant feature is personal service. The total annual value of new business of all descriptions handled exceeded £30,000. The transactions numbered approximately five thousand. As was indicated in the report for last year, the object of the branch, in so far as telephones are concerned, is to bring into profit telephone lines and equipment which are lying idle and which can be brought into use at small cost. In this connection the Commercial Branch has worked in the closest association with the officers of the Engineering Branch, as the co-operation of these two branches is essential to the extension of the telephone business on sound economic lines. The institution, in March last year, of a system of monthly rentals has been helpful in enabling new telephone business to be secured. Spread over twelve payments in the year, settlement of the telephone rental becomes as easy as settlement of any other monthly account. There is little doubt that this arrangement has popularized the telephone and brought it within the reach of many who previously considered it to be beyond their means. The Commercial Branch has been instrumental not only in securing new subscribers, but also in retaining a number of old subscribers who had notified their intention of relinquishing their telephones. Some people who are thus induced to continue do so, of course, for only a short period, but others, once having reversed their decision to relinquish, reinstate themselves as permanent subscribers. The field staff of the Commercial Branch which, at the outset, comprised four Business Managers, one each at Auckland and Christchurch and two at Wellington, has now been increased at Auckland to one Business Manager and two Business Agents ; at Wellington, to two Business Managers and one Business Agent; at Christchurch, to one Business Manager and one Business Agent; and at Dunedin, to one Business Manager : a total of nine officers. In addition, for the purpose of canvassing the residential areas of the smaller centres, the services were requisitioned of local officers who, over short periods, devoted the whole of their time to the making of an intensive canvass of the residential areas. In this way the residential areas of Napier, Wanganui, Palmerston North, Hawera, New Plymouth, Timaru, and Invercargill have been covered with a resultant increase in the number of telephone subscribers. The operations of the Commercial Branch have been extended to the field of advertising in that the sale of space in telephone directories, which was formerly undertaken by an advertising contractor, has been taken over by the branch. The change coincided with an alteration in the layout of directories. In future all telephone directories will have two columns of names to the page instead of one, and each page will bear not more than one advertisement which will be accommodated in a one-inch space at the top of the page. This restriction on advertising space greatly improves the appearance of the directories, and enhances their value both as telephone directories and as advertising media. In this new field, the Commercial Branch has been singularly successful, practically the whole of the advertising-space available in directories of towns visited by Business Managers being sold. The advertising contractor who formerly canvassed for directory advertisements has been given the right to compile and to print " Classified Business Directories," which will be bound and issued with the official telephone directories. The particular advantage of the business directory will be that it will present in handy form a list of bakers, butchers, grocers, plumbers, florists, &c., each trade grouped together, and will show, besides the names and addresses, the telephone numbers of the business people concerned. For inclusion in the business directory a small charge will be paid by the subscriber to the advertising contractor. The publication in a telephone directory of a classified business directory is not new. The custom has long been in force in the older countries of the world. At the time of taking over the work of obtaining advertisements for telephone directories, the Department took over also the work of obtaining orders for bold-type listings in the columns of names of subscribers. This also was formerly in the hands of an advertising contractor. STORES BRANCH. The following statement indicates the value of stores received and issued in the Auckland, Christchurch, Dunedin, and Wellington storekeeping districts during the year ended the 31st March, 1931, and the value of stocks held at that date. For the purpose of comparison the particulars for the previous year are shown also : —

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1930-31. 1929-30. .. T Stock in hand, T> • . * T * Stock in hand, Receipts. Issues. 3lst March, 1931. Celp Issues. 3lst March, 1930. £ £ £ £ £ £ Auckland 234,809 202,600 134,775 234,302 232,618 102,565 Christchurch .. 83,816 93,668 83,967 164,972 154,976 93,820 Dunedin 70,641 62,291 54,892 93,209 87,718 46,542 Wellington .. 368,370 391,485 281,093 388,217 360,417 304,208 Dominion totals 757,636 750,044 554,727 880,700 835,729 547,135 . ___ * Excluding transfers within storekeeping districts,